As the rebound effects from the recession have almost entirely dissipated, a growth slowdown starting this summer is becoming increasingly apparent, say Bart van Ark, Chief Economist, The Conference Board.

GDP growth for the second quarter, which just ended, might turn out to be the highest for the year, and even here there is a downside risk of the consumer data coming in lower than currently forecasted, despite an uptick in April (and March). There are no signs of a “double dip” recession as The Conference Board Leading Economic Index® (LEI) for the United States points to continued, though slower growth for the rest of this year.

Weak consumer confidence, slow job growth and flat confidence levels among CEOs, just to mention some of the latest data points, all support the slow growth scenario. We also find that there has been a significant re-pricing of credit risk suggesting that financial markets are also weighing lower growth prospects. Altogether we expect GDP growth in a range of 1.5 to 2 percent in the second half as a result of slow consumer spending, weaker investment growth and a significant cutback in government spending.